European Court of Justice, Air Berlin case: Cancellation fees charged by airline companies may be assessed for unfairness

The German airline company Air Berlin included a term in its general terms and conditions stating that, when a passenger cancels a flight booking at an economy rate or does not take the flight, a flat rate sum is to be charged as a handling fee on the amount due to be reimbursed.

The Court decided that the pricing freedom recognized for air carriers by the regulation on the operation of air services does not preclude the application of a national law transposing the directive on unfair terms from leading to a declaration of invalidity of a term in the general terms and conditions and which allows separate flat-rate handling fees to be billed to customers who cancelled their booking or did not take a flight.

The Court finds in that regard that the general rules protecting consumers against unfair terms also apply to contracts of carriage by air.

Furthermore, as regards the price transparency required by the regulation on the operation of air services, the Court decided that when publishing their air fares, air carriers must specify separately the amounts payable by customers in respect of taxes, airport charges and other charges, surcharges or fees and may not, as a consequence, even partially, include those items in the air fare.

The Court finds that the air fare, taxes, airport charges and other charges, surcharges and fees, which make up the final price to be paid must always be brought to the customer’s attention in terms of the amounts that they represent in that final price. If air carriers were able to choose between including those taxes, charges, surcharges and fees in the air fare and indicating those different items separately, the objective of that regulation to ensure information and transparency with regard to prices would not be achieved.

The above said has been decided in Case C-290/16 against Air Berlin company on 6 July 2017.